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27 Apr, 2010 21:28

Goldman Sachs the center of Capitol Hill circus

Goldman Sachs executives faced questioning in the US Senate today, but the media circus surrounding the hearing was more interesting than what was going on inside.

 On Capitol Hill, Goldman Sachs executives looked more like animals at the zoo, stared at from all angles as senators questioned them about “exotic” investment instruments.

Fabrice Tourre, a Goldman banker, is suddenly a tv star after being named in the Security and Exchange Commission’s civil suit against the investment bank. Protestors outside the hearing see Tourre and his colleagues as criminals; politicians see them as gamblers. And the press keeps coming in droves to see the spectacle.

With the circus going on around the case, it isn’t clear if people really want to get to the bottom of the complex synthetic financial instruments at the center of the investigation or just see some rich bankers take the blame for the near-collapse of the entire American financial system.

“It brought the economy to its knees, millions of Americans have been brought to their knees, but the bookie made out pretty well,” said Senator Clair McCaskill (Democrat-Missouri)

“These guys have looted the American economy, the global economy, millions of people losing their home their jobs, and the American people want justice,” said protestor Medea Benjamin.

Edward Harrison, founder of blog Credit Writedowns, notes that there are different questions still awaiting an answer.

“Did Goldman Sachs lie to their clients? That’s something that the jury will decide. After we’ve had 10% unemployment and people losing their homes and their jobs, and they are getting record bonuses even though they were just bailed out by the federal government with gazillions of dollars. How could they, with a straight face, say they are fulfilling their role in society?” said Edward Harrison.